Chinese Baidu backs US-based fintech firm ZestFinance

Chinese search giant Baidu is making an undisclosed investment in a US-based fintech firm ZestFinance, Fortune reported on Monday.

ZestFinance, which also last year received an undisclosed investment from Chinese e-commerce site JD.com, is a start-up that blends machine learning with big data analysis to pinpoint more accurate credit scores.

ZestFinance launched three years ago to apply big data analyses to credit scoring and help lenders more accurately evaluate prospective borrowers. It was founded by former Googleveteran Douglas Merrill.

As part of the investment, Fortune said Baidu will be using ZestFinance’s underwriting technology to determine creditworthiness of its users. For example, if an adult user is searching for video games in the middle of the day, it could be determined that he or she doesn’t have a job and isn’t a student, which is data that can be used towards determining if that user has good credit.

Zest is a tech platform that applies Google-like math to credit decisions.

This new technology is able to consume vast amounts of data to more accurately identify good borrowers — enabling higher repayment rates for lenders and lower-cost credit for consumers.

“At ZestFinance, there is no human interaction of any kind involved in underwriting. Instead, we rely on several mathematical models running in parallel to make underwriting decisions. While many creditors take hours, or even days, to make credit decisions, we make them — accurately — in less than 10 seconds,” acording to ZestFinance.